ISCR Case 14-01506.h1

Case Headnote

ISCR Case No. 14-01506.h1

deniedJan 21, 2015· Hon. Robert Robinson Gales· hearing

Summary

A 42-year-old defense contractor and former Navy chief petty officer was denied a security clearance due to concerns under Guideline E (Personal Conduct), Guideline F (Financial Considerations), and Guideline J (Criminal Conduct). The denial stemmed from unresolved financial issues, past criminal conduct involving embezzlement, and the falsification of information on his security clearance application.

Specifically, the applicant falsely answered "no" to questions about his police record on his October 30, 2013 e-QIP, despite having been convicted by a Special Court-Martial three years prior for two violations of Article 121, UCMJ (larceny). He was sentenced to 85 days confinement, reduction from E-7 to E-5, ordered to forfeit $1,500, and fined $3,800. He also falsely denied having delinquent financial accounts, concealing multiple debts totaling approximately $31,546 that were either in collection, charged off, or over 120 days delinquent.

The criminal conduct involved the applicant, while a Navy chief petty officer, altering and falsifying travel claims between 2007 and 2010, depositing the funds into his personal bank account. He admitted to using an unspecified portion of these funds, estimated at $80,000, to assist his brother. Following an NCIS investigation, he was charged under the UCMJ and, as part of a plea agreement, pled guilty to two larceny charges. The judge found that the applicant failed to demonstrate responsible financial management or mitigate concerns from his criminal behavior.

Why the Applicant Was Denied

The applicant failed to mitigate security concerns regarding financial considerations, criminal conduct, and personal conduct.
The applicant admitted to multiple delinquent debts totaling approximately $31,546, which were placed for collection or charged off.
The applicant falsified responses on his security clearance application regarding his criminal record and financial delinquencies.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 19(d)raisedDeceptive or Illegal Financial Practices

Key Rule Quoted

“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedJun 3, 2014
Answer filedJul 1, 2014Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decision based on written record.
Decision dateJan 21, 2015

Cite For

Failure to Mitigate Financial Obligations Under Guideline F
Criminal Conduct Leading to Security Clearance Denial Under Guideline J
Falsification of Information on Security Clearance Applications Under Guideline E

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
3.a	On October 30, 2013, when Applicant completed his e-QIP, he responded to a question pertaining to his police record. The question in Section 22 – Police Record asked if, in the last seven years, he had been charged, convicted, or sentenced of a crime in any court, including charges, convictions or sentences in any federal, state, local, military, or non-US court. Applicant answered “no” to the question. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to that question was, in fact, false. Applicant had been charged three years earlier with violations of Articles 107, 121, 123, and 132, UCMJ; and convicted by a Special Court-Martial of two violations of Article 121, UCMJ. Applicant was sentenced to 85 days confinement, reduction from E-7 to E-5, ordered to forfeit $1,500, and fined $3,800. Applicant admitted falsifying his response and offered no explanation for his falsification.	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	Criminal Conduct	Admitted	—	—	—
3.b	In that same e-QIP, Applicant responded to questions pertaining to his financial record. The questions in Section 26 – Financial Record (Delinquency Involving Routine Accounts) asked if, in the past seven years, he had bills or debts turned over to a collection agency; had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed; been over 120 days delinquent on any debt not previously entered; and if he was currently over 120 days delinquent on any debt. Applicant answered “no” to those questions. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to those questions was, in fact, false for Applicant had concealed multiple accounts that were either placed for collection, charged off, or were over 120 days delinquent. Applicant admitted falsifying his response and offered no explanation for his falsification.	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	Financial	Admitted	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

3.a

On October 30, 2013, when Applicant completed his e-QIP, he responded to a question pertaining to his police record. The question in Section 22 – Police Record asked if, in the last seven years, he had been charged, convicted, or sentenced of a crime in any court, including charges, convictions or sentences in any federal, state, local, military, or non-US court. Applicant answered “no” to the question. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to that question was, in fact, false. Applicant had been charged three years earlier with violations of Articles 107, 121, 123, and 132, UCMJ; and convicted by a Special Court-Martial of two violations of Article 121, UCMJ. Applicant was sentenced to 85 days confinement, reduction from E-7 to E-5, ordered to forfeit $1,500, and fined $3,800. Applicant admitted falsifying his response and offered no explanation for his falsification.

Against Applicant

Lack of Candor in InterviewFOUND DELIBERATE

Criminal Conduct

Admitted

—

3.b

In that same e-QIP, Applicant responded to questions pertaining to his financial record. The questions in Section 26 – Financial Record (Delinquency Involving Routine Accounts) asked if, in the past seven years, he had bills or debts turned over to a collection agency; had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed; been over 120 days delinquent on any debt not previously entered; and if he was currently over 120 days delinquent on any debt. Applicant answered “no” to those questions. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to those questions was, in fact, false for Applicant had concealed multiple accounts that were either placed for collection, charged off, or were over 120 days delinquent. Applicant admitted falsifying his response and offered no explanation for his falsification.

Against Applicant

Lack of Candor in InterviewFOUND DELIBERATE

Financial

Admitted

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a credit card that was past due and charged off in the amount of $1,137 $1,137	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (d) deceptive or illegal financial practices	—	—
1.b	an internet account with an unpaid balance of $137 $137	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	a telephone account with a remaining balance of $2,004 $2,004	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	an unspecified bank loan that was past due and charged off in the amount of $1,660 $1,660	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	an unspecified bank loan that was past due in the amount of $875 $875	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	specific text not stated in this decision	Against Applicant	Unspecified Financial	Denied	—	—	—
1.g	an unspecified type of loan account that was past due and charged off in the amount of $4,179 $4,179	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	specific text not stated in this decision	Against Applicant	Unspecified Financial	Denied	—	—	—
1.i	a credit union account that was 180 days past due in the amount of about $11,766 $11,766	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	an insurance account with an unpaid balance of $145 $145	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	a credit union account that was 180 days past due in the amount of $5,995 $5,995	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

a credit card that was past due and charged off in the amount of $1,137

$1,137

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) deceptive or illegal financial practices

—

1.b

an internet account with an unpaid balance of $137

$137

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

a telephone account with a remaining balance of $2,004

$2,004

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

an unspecified bank loan that was past due and charged off in the amount of $1,660

$1,660

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

an unspecified bank loan that was past due in the amount of $875

$875

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

specific text not stated in this decision

Against Applicant

Unspecified Financial

Denied

—

1.g

an unspecified type of loan account that was past due and charged off in the amount of $4,179

$4,179

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

specific text not stated in this decision

Against Applicant

Unspecified Financial

Denied

—

1.i

a credit union account that was 180 days past due in the amount of about $11,766

$11,766

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

an insurance account with an unpaid balance of $145

$145

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.k

a credit union account that was 180 days past due in the amount of $5,995

$5,995

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.l

specific text not stated in this decision

Against Applicant

Unspecified Financial

Unknown

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
2.a	From May 2007 until August 2010, Applicant was a Navy chief petty officer (E-7) working in the disbursing office aboard a naval ship homeported overseas. In mid-2009, because his brother’s health condition was worsening with tuberculosis, and he was in need of hospitalization, food, aid, and medication, Applicant started sending him money. He estimated that he had given his brother $80,000. An unspecified portion of the money was not Applicant’s. While working in the disbursing office, Applicant altered and falsified travel claims submitted by sailors for reimbursement, and the funds were deposited in Applicant’s personal bank account. He knew he was not entitled to the money, and he was aware that what he was doing was illegal. Following a criminal investigation conducted by the Naval Criminal Investigative Service (NCIS), in December 2010, Applicant was charged with criminal conduct under the Uniform Code of Military Justice (UCMJ). Applicant was charged with making false official statements, in violation of Article 107, UCMJ; two counts of larceny, in violation of Article 121, UCMJ; forgery, in violation of Article 123, UCMJ; and committing fraud against the United States, in violation of Article 132. He was subsequently tried by a Special Court-Martial, and as part of a pretrial plea agreement, he pled guilty to the two larceny charges, with the remaining charges dismissed. Applicant was sentenced to 85 days confinement, reduction from E-7 to E-5, ordered to forfeit $1,500, and fined $3,800.	Against Applicant	Fraud or Deception Criminal	Convicted	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability (c) currently on parole or probation (d) violation of parole/probation or failure to complete a court program	—	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

2.a

From May 2007 until August 2010, Applicant was a Navy chief petty officer (E-7) working in the disbursing office aboard a naval ship homeported overseas. In mid-2009, because his brother’s health condition was worsening with tuberculosis, and he was in need of hospitalization, food, aid, and medication, Applicant started sending him money. He estimated that he had given his brother $80,000. An unspecified portion of the money was not Applicant’s. While working in the disbursing office, Applicant altered and falsified travel claims submitted by sailors for reimbursement, and the funds were deposited in Applicant’s personal bank account. He knew he was not entitled to the money, and he was aware that what he was doing was illegal. Following a criminal investigation conducted by the Naval Criminal Investigative Service (NCIS), in December 2010, Applicant was charged with criminal conduct under the Uniform Code of Military Justice (UCMJ). Applicant was charged with making false official statements, in violation of Article 107, UCMJ; two counts of larceny, in violation of Article 121, UCMJ; forgery, in violation of Article 123, UCMJ; and committing fraud against the United States, in violation of Article 132. He was subsequently tried by a Special Court-Martial, and as part of a pretrial plea agreement, he pled guilty to the two larceny charges, with the remaining charges dismissed. Applicant was sentenced to 85 days confinement, reduction from E-7 to E-5, ordered to forfeit $1,500, and fined $3,800.

Against Applicant

Fraud or Deception Criminal

Convicted

Admitted

(a) pattern of minor offenses casting doubt on judgment/reliability

(c) currently on parole or probation

(d) violation of parole/probation or failure to complete a court program

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES